Capital Flows

Shaking up Development Finance in Latin AmericaC.P. Chandrasekhar and Jayati Ghosh

January 2, 2008

The signing of the agreement by seven South American countries to form the Banco del Sur (Bank of the South) may herald a new era in development finance. The creation of the Banco del Sur is part of a broader trend within Latin America of governments increasingly distancing themselves from the IFIs that are widely perceived as too biased in favour of US interests. Even if this plan succeeds partially, it will be an important source of hope for the rest of the developing world.